LONDON (Alliance News) - The FTSE 100 was seen to open lower on Thursday, amid disappointing growth in UK house prices that fell well shy of forecasts and growing geopolitical tension between the US and North Korea.
North Korea on Thursday said it planned to fire rockets near the US territory of Guam soon as a "crucial warning," adding that "only absolute force can work" on US President Donald Trump.
The comments were the latest escalation in a war of words between Washington and Pyongyang over North Korea's nuclear weapons programme and UN sanctions against it.
In early corporate news, multi-commodity miner Glencore said it returned to net profit in the first half of 2017, while Coca-Cola HBC said profit increased in the first six months of the year on higher volumes and prices.
Still in the UK corporate calendar are interim results from insurer Prudential, due at 0930 BST.
Here is what you need to know at the London market open:
FTSE 100: seen down 0.5%, or 41.56 points at 7,456.50
Hang Seng: down 1.0% at 27,484.81
Nikkei 225: closed down 0.1% at 19,729.74
DJIA: closed down 0.2% at 22,048.70
S&P 500: closed marginally lower at 2,474.02
GBP: down at USD1.2981 (USD1.3002)
EUR: firm at USD1.1738 (USD1.1734)
GOLD: up at USD1,278.90 per ounce (USD1,275.37)
OIL (Brent): up at USD52.90 a barrel (USD52.25)
(changes since previous London equities close)
ECONOMICS AND GENERAL
Thursday's Key Economic Events still to come
(all times in BST)
0745 France Industrial Output
0900 Italy Global Trade Balance
0900 Italy Trade Balance EU
0930 UK Manufacturing Production
0930 UK Industrial Production
0930 UK Total Trade Balance
1100 Ireland HICP
1100 Ireland Consumer Price Index
1300 UK NIESR GDP Estimate
1330 US Producer Price Index
1330 US Jobless Claims
1500 US Fed's William Dudley speech
1530 US EIA Natural Gas Storage change
The house price balance in the UK came in with a score of +1 in July, the Royal Institution of Chartered Surveyors said on Thursday. That was well shy of forecasts for a score of +9, and down sharply from +7 in June. "Sales activity in the housing market has been slipping in the recent months and the most worrying aspect of the latest survey is the suggestion that this could continue for some time to come," said Simon Rubinsohn, RICS chief economist.
Producer prices in Japan were up 0.3% on month in July, the Bank of Japan said on Thursday.
That exceeded expectations for an increase of 0.2% following the upwardly revised 0.1% gain in June , having originally been reported as flat. On a yearly basis, producer prices advanced 2.6% - again topping forecasts for 2.3% following the upwardly revised 2.2% increase in the previous month, having originally been 2.1%. Export prices were up 0.1% on month and 2.5% on year, the bank said, while import prices fell 1.0% on month and surged 5.9% on year.
North Korea on Thursday said it planned to fire rockets near the US territory of Guam soon as a "crucial warning," adding that "only absolute force can work" on US President Donald Trump. Trump had "let out a load of nonsense about 'fire and fury,' failing to grasp the on-going grave situation," General Kim Rak Gyom, commander of the Strategic Force of the Korean People's Army (KPA), said in a statement, according to the state-run news agency KCNA. "Sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him," Kim continued. The general said Pyongyang was planning to launch four Hwasong-12 rockets that would fly over Japan and hit the water around 30 to 40 kilometres away from the US territory of Guam in the western Pacific. He said the plan would be finalized by mid-August and that the KPA would then await the orders of "the commander-in-chief of the DPRK (Democratic People's Republic of Korea) nuclear force." The comments were the latest escalation in a war of words between Washington and Pyongyang over North Korea's nuclear weapons programme and UN sanctions against it.
BROKER RATING CHANGES
HSBC RAISES DIRECT LINE PRICE TARGET TO 440 (372) PENCE - 'BUY'
HSBC RAISES INTERTEK PRICE TARGET TO 4150 (3520) PENCE - 'HOLD'
UBS RAISES HASTINGS GROUP PRICE TARGET TO 350 (320) PENCE - 'BUY'
RBC CAPITAL RAISES ALDERMORE PRICE TARGET TO 295 (280) PENCE - 'OUTPERFORM
BARCLAYS RAISES SYNTHOMER PRICE TARGET TO 525 (507) PENCE - 'OVERWEIGHT'
GOLDMAN CUTS ULTRA ELECTRONICS PRICE TARGET TO 2164 (2185) PENCE - 'NEUTRAL'
GOLDMAN RAISES PETS AT HOME PRICE TARGET TO 180 (172) PENCE - 'NEUTRAL'
BERENBERG RAISES PETS AT HOME TO 'BUY' ('HOLD') - TARGET 230 (180) PENCE
BERENBERG RAISES GREGGS TO 'BUY' ('HOLD') - TARGET 1300 (1020) PENCE
COMPANIES - FTSE 100
Multi-commodity miner Glencore said it returned to net profit in the first half of 2017 of USD2.45 billion from a USD369 million loss the year before. Glencore reported adjusted earnings before interest, taxes, depreciation and amortisation of USD6.74 billion in the first half of 2017, above USD4.02 billion a year earlier. The FTSE 100 miner said that interim adjusted Ebit rose to USD3.80 billion from USD875 million the year before. The miner said net debt was reduced by USD1.6 billion from USD13.9 billion at the end of 2016. "Our extensive efforts to reposition our balance sheet and drive further industrial asset portfolio improvements over the last twenty-four months, are reflected in our strong first-half financial performance," said Glencore Chief Executive Officer Ivan Glasenberg.
Coca Cola HBC reported "excellent" half year results. The fizzy drinks bottler said net profit rose to EUR191.6 million in the first six months of the year from EUR140 million a year earlier. Net sales revenue rose 5.6% to EUR3.21 billion, "helped by our revenue growth initiatives, including pricing, and higher volumes in all segments". Volumes rose 1.4% in the first half, while the earnings before interest and taxes margin increased by 150 basis points to 9.1%, "benefiting from operating leverage despite adverse input costs and foreign exchange movements". Coca Cola expects the good volume trends to continue in the second half, with an acceleration in the developing markets.
The Venezuelan government and Royal Dutch Shell reviewed the onshore and offshore gas projects under development in the South American country, and the Anglo-Dutch company reaffirmed its interest in the region late Wednesday. After a meeting between Venezuela's Oil Minister Nelson Martinez and Shell's vice president for South American & African gas, Mounir Bouaziz, the oil company executive said that Shell "has many reasons to participate in projects with Venezuela", mainly because of the country's "geographical location, which allows distribution to the Caribbean, Europe, and Asia."
COMPANIES - FTSE 250
Go-Ahead Group said its 65%-owned joint venture with Keolis, Govia, has been unsuccessful in its bid to win the new West Midlands rail franchise in the UK. "London Midland and its people have been part of our Group's rail business for ten years. In that time we have delivered significant improvements across the entire network which have seen London Midland transformed into an award-winning franchise with high levels of employee engagement and customer satisfaction," said Chief Executive David Brown. Govia will continue to operate the current contract until December 2017.
Amec Foster Wheeler said it turned to a GBP77 million pretax profit in the first half of 2017 from a GBP446 million loss the year before, despite revenue falling year-on-year to GBP2.33 billion from GBP2.84 billion. Still, the company did not pay a dividend for 2017, having paid 7.4 pence per share a year earlier. "We have made a strong start to our transformation programme. We began 2017 with the full roll out of our new, leaner, operating model. This was designed to bring our people closer to projects and customers, enabling us to deliver cost efficiencies across the business and to improve the consistency with which each part of the business operates," said the company." The all-share offer from John Wood Group remains on schedule to close in the fourth quarter, it said. In addition, Amec announced its first contract in the Australian petrochemicals market on Thursday.
Cineworld report a 58% lift in first half pretax profit to GBP48.2 million from GBP30.6 million the year before as revenue rose 18% to GBP420.2 million, up 12% at constant currency. The interim dividend was raised over 15% to 6.0 pence from the 5.2p payout the year before. "Based on the film slate in the second half and our first half results, we remain confident of delivering a performance for the year as a whole in line with current market expectations," said the company.
COMPANIES - LONDON MAIN MARKET AND AIM
DFS Furniture confirmed that revenue in the second half has been weaker than we expected owing to significant declines in store footfall and customer orders across April, May and June, stating it is an "industry-wide" issue. Overall revenue for the second half was 4% lower than the prior year, following an increase of 7% in the first half, to deliver growth of 1% over the year as a whole. Consequently, earnings before interest, tax, depreciation and amortisation for the year will be at the "low end" of the GBP82 million to GBP87 million range previously given, with revenue impacts being partly offset by cost flexibility and the early benefits of operating efficiency initiatives.
Premier Oil said it has appointed Roy Franklin as non-executive chairman from the start of September, succeeding Mike Welton after eight years with the business. In addition, Dave Blackwood and Mike Wheeler will also join the board as non-executives to replace two that retired earlier this year. Franklin spent 18 years at BP after which he was managing director of Clyde Petroleum and then CEO of Paladin Resources, until its acquisition by Talisman Energy in 2005.
COMPANIES - INTERNATIONAL
US media giant 21st Century Fox reported a drop in fourth-quarter profit, a result it attributed to its film division's failure to match last year's box office hits. net income to USD476 million from USD567 million in the same period last year. Total revenue increased by 1.5% to USD6.75 billion, due to higher advertising income from its cable network, home to pay TV channel FX and flag ship broadcaster Fox News, but narrowly missed Wall Street forecasts. Fox's movie studio meanwhile struggled with a decline in ticket sales and resulting revenue loss of 11.5%, unable to reproduce the success of last year's 'Deadpool' and 'The Martian.' The results come as Fox attempts to buy the remaining 61% of shares in British broadcaster Sky it doesn't already own. British media regulators are investigating concerns the takeover could give Murdoch's family too much influence over the country's media. The USD1.7 billion deal could be delayed until mid-2018, a Fox spokesperson said.
Facebook said it is introducing Watch, a new platform for shows on the world's largest social network. Shows are made up of episodes - live or recorded - and follow a theme or storyline. The company said that it will be introducing Watch to a limited group of people in the US and plan to bring the experience to more people soon. Similarly, it will be opening up shows to a limited group of creators and plan to roll out to all soon.
Thursday's Shareholder Meetings
IP Group (re offer for Touchstone Innovations)
TT Electronics (re sale of assets)